Most advice about a late Montenegrin developer stops at the commercial layer — check the payment schedule, register a zabilježba, tie tranches to construction stages. That advice is correct, and it is the layer before the one you need once the date has actually passed.
What decides the case then is the Zakon o obligacionim odnosima, Articles 119 to 131. And the first question it asks is not how late they are. It is whether the delivery date was an essential element of your contract — because that single fact changes whether you must give them another chance, or whether the contract has already ended without you doing anything.
A note on numbering before we start. Croatian and Serbian sources discuss the same rules under different article numbers — you will see the additional-period rule cited as "Article 363". That is not the Montenegrin numbering. In Montenegro it is Article 121. Every article number on this page is from the Montenegrin text.
Rescind, or demand performance — and damages either way
Article 119 sets the frame. In a bilateral contract, where one party does not perform, the other may — unless otherwise provided — demand performance, or, on the conditions the Act lays down, rescind by simple declaration where rescission does not occur by operation of law. And in every case:
in any event has the right to compensation for damage.
That last clause is easy to skip. Rescinding does not trade away your damages claim; it sits alongside it.
The question that decides everything: was the date essential?
Article 120 — where performance within the period is an essential element of the contract. If the debtor does not perform within that period, the contract is rescinded by operation of law (po samom zakonu). Nobody has to declare anything.
That cuts both ways, which is why buyers get it wrong in both directions.
If you want the property — a delayed but desirable unit in a rising market — then a contract that has already dissolved by law is not what you want. Article 120 gives you the way to keep it alive:
The creditor may keep the contract in force if, on expiry of the period, without delay, they notify the debtor that they demand performance.
Without delay. Not "in the next few weeks while we see what happens". And if you then demanded performance and did not receive it within a reasonable time, you may declare rescission after all.
The article also settles two situations people argue about: it applies where the parties themselves provided that the contract will be deemed rescinded if not performed by a date, and where timeliness is essential by the nature of the business.
Article 121 — where the period is not an essential element. Here the position reverses. The debtor retains the right to perform even after the deadline, and the creditor may demand performance. If the creditor wants to rescind:
they must give the debtor an appropriate additional period (naknadni rok) for performance.
If the debtor does not perform within that additional period, the same consequences follow as where the date was essential.
So the practical sequence for most off-plan contracts is: identify whether the date was essential; if it was not, set an appropriate additional period in writing; and only then rescind.
Three situations where you do not have to wait
Article 122 — the debtor has made it clear. The creditor may rescind without giving an additional period if it follows from the debtor's conduct that they will not perform even within an additional period. Conduct, not words alone — a site that has been abandoned, a company that has stopped answering, work that has visibly gone backwards.
Article 123 — before the deadline has even arrived. Where, before the deadline expires, it is obvious that one party will not perform, the other may rescind and claim damages. You are not obliged to watch a deadline approach that everyone knows will be missed.
Article 124 — contracts with successive obligations. Where one obligation is not performed, the other party may, within a reasonable time, rescind as to all future obligations, if it is obvious from the circumstances that those will not be performed either. And further: rescission may extend to obligations already performed, where their performance without the missing ones has no interest for that party. The debtor can stop this: they may keep the contract alive by providing appropriate security.
For a phased-payment project, this is the article that matters. Missing one milestone is not just a problem about that milestone.
Two limits on rescinding
Article 125 — tell them. A creditor who rescinds because of non-performance must communicate that to the debtor without delay. Rescission is not something you establish later in a letter from your lawyer; it is a declaration that has to be made and communicated.
Article 126 — proportion. A contract cannot be rescinded for non-performance of an insignificant part of the obligation. A missing kitchen cupboard is not a rescission event.
What rescission actually gets you back
Article 127 is the part worth reading twice, because it contains a rule most buyers do not expect.
- Both parties are released from their obligations, except the obligation to compensate any damage.
- A party who performed the contract wholly or partly has the right to have returned what they gave.
- Where both sides must return, the mutual restitutions follow the rules for performing bilateral contracts.
- Each party owes the other compensation for the benefits they had in the meantime from what they must return.
- And then:
The party returning money is obliged to pay default interest from the day it received the payment.
Not from the day of rescission. Not from the day of demand. From the day it received the money. For a deposit paid three years ago against a building that never rose, that is a materially different number from the deposit alone — and it is why the refund conversation should never start at "give me my money back".
When nobody is at fault: changed circumstances
Articles 128 to 131 are the separate route, and they are not about delay — they are about a contract that has become crushing.
Article 128. Where, after conclusion, circumstances arise that could not have been foreseen and that make one party's performance excessively difficult, or would cause it excessively great loss, the court may, at that party's request, modify or rescind the contract. But not where the party invoking them was bound to take those circumstances into account at conclusion, or could have avoided or overcome them.
Article 129. The party entitled to invoke changed circumstances must notify the other party of its intention as soon as it learned that such circumstances arose — and if it did not, it is liable for the damage the other party suffered because the claim was not communicated in time.
Article 130. In deciding, the court is guided by good faith and fair dealing, having regard in particular to the purpose of the contract, the normal risk in contracts of that kind, the effect and duration of the extraordinary circumstances, and the balanced interests of both parties.
Article 131. The parties may agree in advance to waive reliance on particular changed circumstances — unless that is contrary to the principle of good faith and fair dealing.
Read Article 130's "normal risk in contracts of that kind" carefully before relying on this route against a developer. Construction delay is, in a construction contract, close to a normal risk. Changed circumstances is not a general-purpose escape from a bad bargain.
What this does not do
Two things this chapter does not give you, which the commercial advice is right about.
It does not create a deposit protection scheme. There is no requirement here that a developer ring-fence your money or insure completion. What protects a buyer in practice is a notarised contract with an annotation registered against the specific unit, and a payment schedule tied to construction progress rather than paid up front.
And it does not answer defects. Handover-day and post-completion defect claims run on a different set of rules and different clocks — see seller's liability for defects after completion and new-build handover and snagging. Time limits for bringing claims generally are covered in limitation periods.
What to do in the week the date passes
- Find the delivery clause and decide, on its wording and on the nature of the deal, whether the date was an essential element. Everything downstream turns on that.
- If it was essential and you want the unit, notify without delay that you demand performance — Article 120 is unforgiving about the word without.
- If it was not essential and you want out, set an appropriate additional period in writing, and keep proof of delivery of that letter.
- If the site is abandoned or the company has gone quiet, consider Articles 122 and 123 — you may not have to wait at all.
- On a phased project, look at Article 124 before treating a single missed milestone as a single problem.
- When you calculate what to demand, calculate default interest from the date each payment was made, not from the date you asked for it back.
Whose side we are on, and how we are paid
RoNa Legal DOO works for owners and buyers, not for developers, agents or sellers. We are paid by the client we act for, and by no one else in the transaction — we take no commission, referral fee or share of any contract we review.
Work that requires representation before a Montenegrin court or state authority is carried out by an advocate admitted to the Montenegrin Bar. Our own role is the preparatory and advisory layer: reading the delivery clause against Articles 120 and 121, drafting the notice that either preserves the contract or starts the additional period, computing the interest position under Article 127, and preparing the file the advocate uses.
If the date has already passed
Send us the contract, the payment receipts with their dates, and any correspondence since the deadline. The first two answers we can give quickly are whether the date was essential — which decides whether you still have a contract — and what the Article 127 interest position is on what you have already paid.
